WHAT SHOULD DIGITAL MONEY LOOK LIKE?
Our world is becoming increasingly digital, and so is our money.
That begs the question: what do we want our digital money to look like?
Many countries are exploring issuing a Central Bank Digital Currency (CBDC) which is a fully digital form of our existing currency.
Let's take a look at the difference between two forms of digital money: Bitcoin & Central Bank Digital Currencies (CBDCs).
BITCOIN
Spend without permission
CBDC
Requires permission to spend
Bitcoin is designed to give you total control over your money. No one can stop you from transacting. CBDCs are designed to give governments and central banks total control over your money.
BITCOIN
Your money never expires
CBDC
Your money can expire
Bitcoin never expires and has no monthly fees. CBDCs can be programmed to expire to prevent you from saving for the future.
BITCOIN
Fixed supply of 21M BTC
CBDC
No limit on total supply
Bitcoin has a hard cap of 21M BTC that will ever exist. CBDCs, much like the currencies we use today, have no cap on total supply. This lack of cap on total supply allows the government to expand the money supply, which causes inflation.
BITCOIN
Pseudonymous
CBDC
Linked to government ID
Bitcoin addresses are psuedonymous, which means they are not linked to your real name or identity. CBDCs are directly linked to your real name and identity which enables massive financial surveillance and censorship.
BITCOIN
Decentralized
CBDC
Centralized
The Bitcoin Network is decentralized with tens of thousands of independent nodes validating the network. CBDCs are centralized in the hands of the government and central banks, which gives them complete control over the CBDC network.
BITCOIN
Users can run nodes
CBDC
Users can't run nodes
Bitcoin allows anyone to run a node that verifies the rules of the network are being followed. CBDCs don't allow anyone to run nodes and rely on trust in the government and central banks.
BITCOIN
Can't be frozen
CBDC
Easily frozen
Bitcoin is designed to make it impossible for others to freeze your money. CBDCs are designed to make it easy for governments and central banks to freeze your money.
BITCOIN
Can be self-custodied
CBDC
Must trust custodians
Bitcoin is designed to give users full control over their money. This means you can self-custody your Bitcoin and keep your money in your control. CBDCs require you to trust custodians, like a bank or government, to hold your money for you.
BITCOIN
Predictable monetary policy
CBDC
Changing monetary policy
Bitcoin has a predictable monetary policy that is fixed in code and can't be changed. CBDCs, like our currencies today, have a monetary policy that can easily be changed. This results in inflation when politicians print too much money.
BITCOIN
Secure
CBDC
Insecure
Bitcoin is the most secure computing network that has ever existed and has never been hacked. CBDCs rely on governments and banks to secure the network, which have been hacked countless times throughout history.